SOURCE: Ithaca Energy Inc

February 25, 2015 02:00 ET

Ithaca Energy Inc. Announces GSA Update

CALGARY, AB--(Marketwired - Feb 25, 2015) - Ithaca Energy Inc. (TSX: IAE) (LSE: IAE)

TSX: IAE; LSE: IAE

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Inc.

Greater Stella Area Schedule Update

25 February 2015

Ithaca Energy Inc. (TSX: IAE; LSE: IAE) ("Ithaca" or the "Company") provides an update regarding the schedule for completion of the "FPF-1" floating production facility modifications programme and start-up of the Greater Stella Area ("GSA") production hub. 

The FPF-1 is being modified by Petrofac in the Remontowa yard in Poland for use on the GSA production hub and completion of this work is the critical path item for the delivery of first hydrocarbons from the hub. Although significant progress has been made on the FPF-1 modifications programme in recent months, the rate of progress is insufficient to achieve sail-away of the vessel from the yard in the second quarter of 2015.

Taking full account of actual performance to date and a conservative view on the completion of commissioning activities, sail-away of the FPF-1 is now planned for late in the first quarter of 2016, resulting in first hydrocarbons in the second quarter of the year. 

The FPF-1 is in an advanced state of mechanical completion and Petrofac has good visibility of all the remaining workscopes necessary to complete and commission the vessel. Over three quarters of the construction works have been finished and mechanical completion is now scheduled for the third quarter of 2015. The vessel commissioning programme is planned to commence in parallel with completion of construction activities in the middle of the year and is forecast to take approximately six months. The FPF-1 and risers have been designed to enable year round installation, hence sail-away can occur at the earliest available opportunity.

The quality of the work being undertaken in the yard remains high, underpinning the expected strong operational performance of the FPF-1, and this will not be compromised to accelerate a sail-away schedule that could ultimately result in a costly and inefficient offshore commissioning and start-up phase.

The remainder of the GSA development programme is progressing well. The Stella drilling campaign is substantially complete, with the results of the clean-up flow test on the fifth and final well (Stella Ekofisk) anticipated in March 2015. The majority of the subsea infrastructure has already been installed and the remaining elements are scheduled for installation in the second quarter of 2015.

The delayed start-up of the GSA is estimated to result in incremental costs prior to first hydrocarbons of approximately $10 million net to Ithaca. These relate primarily to project management costs for the overall development, as the FPF-1 modification costs are being borne by Petrofac. The Company's peak net drawn debt is forecast to be materially unchanged at approximately $850 million, funded from total debt facilities of $1,010 million ($300 million five year senior unsecured notes, $610 million reserves based lending facility and $100 million corporate facility).

Les Thomas, Chief Executive Officer, commented:
"It is disappointing to incur a further delay in completion of the FPF-1 modifications programme. While the drilling and subsea installation aspects of the Greater Stella Area development have progressed well, completion of the FPF-1 programme has proved difficult. Petrofac has clear visibility on what needs to be done and we remain focused on ensuring that all the required work is completed in the yard in order to ensure an efficient offshore start-up."

2014 Financial Results
The Company will publish its 2014 financial results on 31 March 2015 along with the results of its year-end independent reserves evaluation, which is being performed by Sproule International Limited. A presentation to analysts will be held in London on the day of the results, commencing at 12.00 GMT (07.00 EST), which will be accessible via a conference call dial-in and the Company's website (www.ithacaenergy.com). Access details for the conference call will be made available on the Company's website ahead of the event. A presentation to accompany the results will be available on the website prior to the start of the call.

- ENDS -

Enquiries:

Ithaca Energy    
Les Thomas lthomas@ithacaenergy.com +44 (0)1224 650 261
Graham Forbes gforbes@ithacaenergy.com +44 (0)1224 652 151
Richard Smith rsmith@ithacaenergy.com +44 (0)1224 652 172
     
FTI Consulting    
Edward Westropp edward.westropp@fticonsulting.com +44 (0)203 727 1521
Shannon Brushe shannon.brushe@fticonsulting.com +44 (0)203 727 1077
     
Cenkos Securities    
Neil McDonald nmcdonald@cenkos.com +44 (0)207 397 8900
Nick Tulloch ntulloch@cenkos.com +44 (0)131 220 6939
     
RBC Capital Markets    
Jeremy Low jeremy.low@rbccm.com +44 (0)207 653 4000
Matthew Coakes matthew.coakes@rbccm.com +44 (0)207 653 4000

About Ithaca Energy
Ithaca Energy Inc. (TSX: IAE; LSE: IAE) is a North Sea oil and gas operator focused on the delivery of lower risk growth through the appraisal and development of UK undeveloped discoveries, the exploitation of its existing UK producing asset portfolio and a Norwegian exploration and appraisal business targeting the generation of discoveries capable of monetisation prior to development. Ithaca's strategy is centred on generating sustainable long term shareholder value by building a highly profitable 25kboe/d North Sea oil and gas company. For further information please consult the Company's website www.ithacaenergy.com.

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Forward-looking statements
Some of the statements and information in this press release are forward-looking. Forward-looking statements and forward-looking information (collectively, "forward-looking statements") are based on the Company's internal expectations, estimates, projections, assumptions and beliefs as at the date of such statements or information, including, among other things, assumptions with respect to production, drilling, construction times, well completion times, risks associated with operations, future capital expenditures, continued availability of financing for future capital expenditures, future acquisitions and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. When used in this press release, the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "plan", "should", "believe", "could", "target" and similar expressions, and the negatives thereof, whether used in connection with operational activities, Stella first oil, drilling plans, production forecasts, budgetary figures, potential developments or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations, or the assumptions underlying these expectations, will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These forward-looking statements speak only as of the date of this press release. Ithaca Energy Inc. expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based except as required by applicable securities laws. 

Additional information on these and other factors that could affect Ithaca's operations and financial results are included in the Company's Management's Discussion and Analysis for the year ended December 31, 2013, and the Company's Annual Information Form for the year ended December 31, 2013 and in reports which are on file with the Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

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